After weeks of gathering information and three feasibility studies, the nine member board of the Pontotoc Electric Power Association voted unanimously not to offer the fiber to home broadband service.
General manager Chuck Howell said that he appreciated the people who took the time to send in the surveys. “We sent out some 19,000 surveys ad had 2,538 returned. That is a good number which is fifteen and a half percent of the customers.”
Pontotoc Electric serves customers from just inside Union County all the way to Bruce.
Howell said the first feasibility study said it would take 22 years to pay off the system and the other two said it was not financially feasible.
“It would take some period of time before you would even be solvent. You would have to keep borrowing money to pay for it. When you go into private business at some point it should turn around and be profitable.”
Howell explained that by law Pontotoc Electric would have had to set up a second company, or a subsidiary of the electric power company, “And PEPA would have to co-sign, so if the subsidiary company failed, PEPA would have to pay for it.”
The unknown in all the mix was the customer take rate or how many people would actually choose to get the fiber optic service from Pontotoc Electric.
“If we could get 43 percent of the customers to take it we could see a profit after 15 years, but it would take 22 years to pay for it according to the first feasibility study,” Howell noted. “We could have offered 300 megs in and out for some $54 or a gig for $79.95.”
Both the second and the third study said only 35 percent of the people would probably sign on; “we were facing the reluctance of people changing over to our company.”
In addition to this, because of the way the law is written, PEPA had to show how they could build it out across their service area and offer it to everyone. “They don’t have to take it, but in time we were required to have it built out and available for all the customers on our lines.”
Another aspect to the build was the availability of grant monies to get it up and running.
“It was going to cost between $43 to $48 million to completely build out the system,” Howell said. “And the most grant money we could get was $1.9 million.”
The reason for the shortfall in the grant money on Pontotoc’s behalf was because Pontotoc County has enough coverage of some sort of internet access, “even though it may be poor access,” Howell noted. Howell said that through fiber, coax or high frequency radio services 70 percent of the county has some access to the internet.
“Our first and foremost concern is to provide electrical service to our customers and we can’t put that in jeopardy,” Howell said.
And while the window has been shut for now, Howell said there could be a re-visiting of the matter.
“If a lot of grant money became available, we might go forward with the project. I can’t say or speculate what would be done in the future.”